Nike Could Be Missing Out On A Billion-Dollar Opportunity

Nike’s strategy of selling sneakers in limited quantities has created a massive reselling market.

The pre-owned sneaker market, which predominantly features Nike shoes, is now worth $US1 billion, according to industry website Campless.

“If you had $US1 billion you could buy the Chicago Bulls, New Orleans Saints, or San Francisco Giants,” Campless founder and IBM consultant Josh Luber writes on his blog. “You could also buy every sneaker that was resold in the past twelve months.”

A growing culture of so-called sneakerheads buy collectible footwear on eBay, Craigslist, and other sites.

Luber questions whether Nike’s strategy of offering a limited number of sneakers that are sold for 10 times the original price is a missed opportunity.

Reselling sneakers has become an economy with “buyers, sellers, brokers, market-makers and third-party valuation services,” Luber tells FiveThirtyEight. His company compiles data from millions of online auctions.

CamplessCampless illustrates how the sneaker reselling market has grown in recent years.

“By restricting the supply of its popular brands, Nike is tapping into another consumer desire: to have something no else has,” the website writes.

But when it comes to reselling sneakers with hefty mark-ups, Nike lets others take the profits.